APEIRON ACQUISITION VEHICLE I IPO - What You Need to Know

Considering an investment in the APEIRON ACQUISITION VEHICLE I IPO? This offering is different from a traditional company launch. We'll break down what you need to know about this unique investment opportunity in plain language.

This information is based on a recent preliminary filing dated February 3, 2024, so some details might change.

1. What does this company actually do?

APEIRON ACQUISITION VEHICLE I is not a traditional operating company like Apple or Starbucks. Instead, it's a Special Purpose Acquisition Company (SPAC), often called a 'blank check company.'

A group of experienced business professionals (the 'sponsors' and management team) formed this company with a singular objective: to raise capital from investors and then use that capital to acquire an existing private company. Currently, it has no products, services, or operations. Its entire purpose is to identify a suitable private business, merge with it, and thereby bring that private company public through the SPAC structure.

Unlike some SPACs that focus on specific industries, APEIRON ACQUISITION VEHICLE I has a broad mandate, seeking to identify a business opportunity across various sectors. Essentially, it functions as a shell company, a financial vehicle designed to find and acquire another business.

2. How do they make money and are they growing?

As a SPAC, APEIRON ACQUISITION VEHICLE I currently generates no revenue and is not 'growing' in the conventional business sense. It lacks sales, profits, or customers because it does not yet operate a business.

Its potential for growth and investor returns hinges entirely on its ability to:

• Identify and merge with a promising private company within a defined timeframe (typically 18-24 months).
• Successfully complete that merger.
• Ensure the acquired company performs well after becoming public through the SPAC, driving an increase in its stock price.

Therefore, your investment is not in an existing business's earnings, but rather in the management team's capability to identify and successfully merge with a profitable, growing enterprise.

3. What will they do with the money from this IPO?

APEIRON ACQUISITION VEHICLE I will not use the IPO proceeds to build infrastructure or expand operations. Instead, the vast majority of the $70,000,000 raised from this IPO will be deposited into a special, protected trust account.

The company can only use these funds for two primary purposes:

• To acquire the target company once identified.
• To return to investors if the company fails to complete an acquisition within its specified timeframe (typically 18-24 months).

While most IPO proceeds enter the trust, a small portion, typically from funds outside the trust (often provided by the sponsors), covers the SPAC's operating costs during its search. For example, an affiliate of the sponsor will receive $20,000 per month for office space and administrative support once the company lists on Nasdaq. It is important to note that trust account funds are designated for acquisition or investor returns, not for these ongoing operational expenses.

Additionally, while the trust account earns interest, neither the principal nor the interest will cover potential excise taxes (such as those under the Inflation Reduction Act of 2022) that might apply if you redeem your shares.

4. What are the main risks I should worry about?

Investing in a SPAC presents specific risks due to its unique structure:

• Failure to Find a Target & Liquidation Risk: If the company does not identify and complete a merger with a suitable private company within its 18-24 month deadline, it must liquidate. This means it will return funds from the trust account to investors (typically around the initial IPO price, plus minimal interest). However, you would forgo other investment opportunities during this period, and any warrants you hold would expire worthless.
• Acquisition of a Poor-Performing Company: The management team might select an acquisition target that underperforms post-merger, leading to a decline in stock price. There is also the risk of overpaying for an acquisition, resulting in suboptimal returns.
• Significant Dilution: This is a critical consideration for SPAC investors.
  • The SPAC's founders (the 'sponsors,' Apeiron Sponsor I and BBG Beteiligungen GmbH, an affiliate of the underwriter) acquired their initial shares (known as 'founder shares' or Class B ordinary shares) at a significantly low price – approximately $0.009 per share. This grants them substantial ownership (initially about 26.93% of all ordinary shares) for a minimal investment. When you purchase shares at $10 each, you immediately experience dilution due to the sponsors' inexpensive ownership stake.
  • Furthermore, these founder shares possess special 'anti-dilution' rights. If the SPAC issues additional shares later (e.g., to facilitate the merger), founder shares might convert into more than one Class A share for each Class B share held. This could further reduce your percentage of ownership in the combined entity.
  • The IPO units and private placement units purchased by the sponsor and underwriter also include 'warrants' (options to buy more shares at a set price later). If investors exercise these warrants, it creates additional shares, further diluting your ownership.
• Conflicts of Interest:
  • Management team members and directors may have other professional commitments or obligations to different companies. This could potentially divert their focus or require them to offer business opportunities to other entities before APEIRON ACQUISITION VEHICLE I.
  • Given the low cost at which sponsors acquired their founder shares, they have a strong incentive to complete any merger, even if it is not the most advantageous deal for public shareholders, as their founder shares could otherwise become valueless. This pressure to close a deal may not always align with your best interests.
  • Additionally, the company will pay an affiliate of the sponsor $20,000 per month for office space and services, representing an ongoing payment to an insider.
• Investor Exodus: If investors disapprove of the SPAC's chosen acquisition target, they often have the option to redeem their shares for cash before the merger. This can reduce the capital available for the deal or increase stock price volatility.
• Limited Redemption for Large Holders: If you, or a group acting in concert, own more than 15% of the shares sold in this offering, you might face restrictions on redeeming all of your shares without the company's permission during a shareholder vote on the merger.
• No Operating History: You are investing in a concept and a management team, not a business with an established track record.
• Market Sentiment & Regulatory Scrutiny: The SPAC market can be highly volatile, with fluctuating investor interest. Moreover, the SEC has increased its scrutiny of SPACs, which could lead to new regulations impacting their operations or the value of your investment.

5. How do they compare to competitors I might know?

APEIRON ACQUISITION VEHICLE I does not have direct competitors in the traditional sense, as it does not offer a product or service.

Instead, its 'competitors' are entities vying for the same acquisition targets:

• Other Special Purpose Acquisition Companies (SPACs): Numerous other SPACs are actively seeking attractive private companies for acquisition, potentially in similar industries.
• Private Equity Firms: These investment firms also acquire private businesses, placing them in direct competition for the same acquisition opportunities.

Therefore, investors evaluate not the company's products, but the quality and reputation of its management team relative to other SPAC teams.

6. Who's running the company?

For a SPAC, the management team is arguably the most critical factor. As the company has no existing business, your investment fundamentally relies on the experience, track record, and network of its leaders.

The CEO, Lorin Van Nuland, is a seasoned executive with over two decades of experience in strategic investments and corporate development across diverse industries. He has a proven history of identifying and scaling high-growth businesses. The broader management team and the 'sponsors' – Apeiron Sponsor I and BBG Beteiligungen GmbH (an affiliate of the underwriter) – contribute complementary expertise in finance, operations, and mergers & acquisitions. Investors are essentially betting on their collective experience to secure a favorable acquisition.

Notably, the sponsors (Apeiron Sponsor I and BBG) collectively own a significant portion of the company's initial shares, approximately 26.93% of all ordinary shares, primarily through their low-cost founder shares. These founder shares also grant them special voting rights, including the exclusive ability to appoint and remove directors before the business combination, providing them substantial control over the SPAC's strategic direction.

7. Where will it trade and under what symbol?

Upon going public, APEIRON ACQUISITION VEHICLE I expects to trade on a major stock exchange, likely Nasdaq, as indicated in its filing.

• Ticker Symbol: SPACs typically begin trading as 'units' (e.g., APRNU). These units then usually separate into common stock (e.g., APRN) and warrants (e.g., APRNW) a few months after the IPO.

8. How many shares and what price range?

The IPO's lead underwriter is the lead underwriter.

• Number of Units: APEIRON ACQUISITION VEHICLE I plans to offer 7,000,000 units.
• Price Per Unit: SPACs typically price their IPOs at a standard rate. This offering is priced at $10.00 per unit.

Each unit comprises one Class A ordinary share and one-half of one redeemable warrant. Each whole warrant grants the right to purchase an additional Class A share later for $11.50. In total, the company aims to raise $70,000,000 from this offering.

This summary aims to clarify the unique aspects of investing in a SPAC. We encourage you to conduct thorough due diligence and fully understand the investment's implications before making any decisions.